The $750 million offering of the retailer controlled by private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] is expected to price on Thursday and begin trading on the New York Stock Exchange next Friday.

Dollar General, which has 8,700 stores across the United States, plans to sell 34.1 million shares for between $21 and $23 a share. At those prices, Dollar General would be valuing itself more richly than competitors like Target Corp (TGT.N), Wal-Mart (WMT.N) and Dollar Tree .

“The valuation doesn’t look great,” said Nick Einhorn, research analyst with Renaissance Capital in Connecticut. “I wouldn’t expect it to be a home run.”

“It wouldn’t shock me if it ended up being similar to a Dole Food (DOLE.N) which ended up trading down” in its first day of trading last month, he said.

At the midpoint of its pricing range, Dollar General would be valued at roughly 19.4 times 2009 earnings, according to IPOdesktop.com. That compares to valuations of 14.8 times earnings at Wal-Mart and 18.3 times earnings at both Target and Dollar Tree. (DLTR.O)

Still, Dollar General has done a good job improving its earnings potential in recent years, improving store layouts and tweaking the discounter’s brand, analysts said.

“The stores look better. They’re operating them better. It also doesn’t hurt to be a dollar store in the worst recession we’ve had since the ’30s,” said Telsey Advisory Group analyst Joseph Feldman, who believes the company has earned the higer valuation.

“It’s above its peers, but it’s a more nimble company. It’s done a little bit better on a consistent basis during the recession,” said Francis Gaskins, president of IPOdesktop.com.

“It’ll probably trade within the range” of $21 to $23 a share after debuting on Friday, he said.

PE WORRIES

Dollar General was acquired by KKR in 2007. Private equity companies have been looking to take advantage of the resurgent stock market in order to unload portfolio companies.

There have been some notable successes, but also some high-profile disappointments, like Fortress Investment Group’s RailAmerica (RA.N). Analysts said that the heavy debt-load of some of these companies has hurt their performance.

Another possible problem for the IPO is a $239.3 million special dividend it paid to its existing owners — which also include underwriters Citigroup (C.N) and Goldman Sachs (GS.N) — in September.

“Investors are always a little wary of things like that,” said Renaissance Capital’s Einhorn. “You want to feel that an IPO is not just being done to line the sponsor’s pockets. That could be a source of resistance.”

Dollar General is one of two IPOs scheduled for next week, with the other being specialty apparel retailer rue21.

Retailers have shied away from IPOs in recent years. Vitamin Shop Inc (VSI.N) had its IPO in late October, becoming the first brick-and-mortar retailer to go public after 2 years on the sidelines.

That company’s shares priced at $17, above their initial range, and have traded up more than 14 percent since the pricing. (Reporting by Michael Erman; editing by Carol Bishopric)

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LogMeIn itself will sell 100,000 shares, with the remainder being offered by existing shareholders. Company backers include Prism VentureWorks (17.55%), Polaris Venture Partners (13.24%), 3TS Capital Partners (8.98%), Integral Capital Partners (5.05%) and Intel Capital.

The company raised $106.7 million via its IPO in late June, pricing at $16 per share.

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Fortress shares were down 5 percent or 23 cents at $4.34 in morning trading.

Fortress said its net loss attributable to Class A shareholders was $59 million, or 43 cents a share, in the quarter, compared with a loss of $57 million, or 66 cents, in the year-earlier period.

Revenue came in at $143.7 million, down from $185.2 million a year earlier, mainly on lower management fees. Analysts had expected revenue of $123 million, according to Thomson Reuters I/B/E/S, and pretax distributed earnings of 9 cents a share. Pretax distributed earnings were 11 cents a share, the company said.

Like other hedge fund firms, Fortress was hit hard last fall as waves of cash-strapped investors tried to withdraw their money. At the end of the quarter Fortress managed $32 billion in assets, down from $34.3 billion a year earlier as it tried to block redemptions.

On a conference call with analysts, Fortress Chief Executive Daniel Mudd was upbeat, noting its assets under management were 21 percent higher than their low of $26.5 billion at the end of March. “After all the gloom and doom, I think we may be going into a golden age of alternatives,” he said.

Other hedge fund managers have also reported the return of new money as markets rebounded this year. Many industry watchers say last year’s worst-ever returns and record redemptions are safely behind them.

The stock has plunged 81 percent since going public at the peak of the buyout bubble in early 2007, though it has surged fourfold from a record low in December last year.

(Reporting by Joseph A. Giannone and Ross Kerber; Editing by Derek Caney, Phil Berlowitz)

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Private equity firms, convenience store operators, rival off-licence chains and retailers are all poring over First Quench’s stores, which include Threshers and other chains, as its administrator KPMG looks to secure a speedy sale, the people said.

R Capital, the owner of Little Chef, the roadside restaurant chain that called in Michelin-starred chef Heston Blumenthal to revitalise the menu at the chain, is looking at the business, as is private equity firm Rutland Partners, sources said.

Hilco and Endless, which also specialise in turning around distressed companies, are interested in all or parts of First Quench’s network, sources said.

The firms declined to comment.

KPMG said on Thursday that it planned to close 373 loss-making First Quench stores, out of its 1,200 store network, at a cost of about 1,700 jobs. 

The stores, which include the Wine Rack, Victoria Wine, Bottoms Up and The Local brands, have been losing around 20 million pounds ($33.2 million) a year, hit by competition from large retailers and small convenience stores.

“We have had a range of interested parties considering everything from one store through to a very large number of stores,” said Ian Corfield, a joint administrator at KPMG.

Indicative offers are due by Nov. 13 with KPMG hoping to sew up the process by Nov. 26.

RETAIL INTEREST

Large multiple retailers are also on the list of parties requesting further information, though First Quench’s stores are viewed as too small for the likes of Tesco (TSCO.L), Asda (WMT.N) and Sainsbury’s (SBRY.L), one source said.

Convenience store chain Costcutter and rival off-licence Bargain Booze are also considering offers, but their franchise model makes them more likely to be interested in First Quench’s small franchise arm, numbering some 86 stores, the source said.

“The franchise business may well be a very attractive proposition for somebody to take on as a unit; we are certainly exploring with various parties whether that will be of interest,” said Corfield, though he declined to comment on individual interested parties.

Costcutter’s majority owner Bibby Line Group and Bargain Booze’s private equity owner ECI Partners both declined to comment.

KPMG’s preferred option is to find a buyer for a large part of the business but it may consider offers for individual brands or even individual stores, Corfield said.

But carving out a brand could present difficulties in separating the business’ supply chain, back office function, logistics and IT, one source said.

“It’s not beyond the wit of man, but it’s not the easiest option either,” the source said. ($1=.6025 Pound)

By Simon Meads and Tom Freke
(Editing by Karen Foster)

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Seth Levine, the Foundry partner on Mandelbrot’s board of directors, declined to comment. Mandelbrot is based in Boulder, Colorado. www.themandelbrotproject.com

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EBay, which is selling Skype in order to focus on its core online auction and payments business, said the group led by Silver Lake reached a settlement with Joltid and Joost, the companies of Skype founders Niklas Zennstrom and Janus Friis.

Under the agreement, Silver Lake and investors including Andreessen Horowitz and the Canada Pension Plan Investment Board (CPPIB), will together hold 56 percent of Skype and eBay will retain 30 percent.

The buyers will no longer include Index Ventures. The Skype founders had filed a lawsuit accusing Index and its partner Michelangelo Volpi of using confidential information in their bid to acquire a 65 percent stake in Skype.

Under the deal, eBay will get approximately $1.9 billion in cash and a note from the buyer worth $125 million. The deal values Skype at $2.75 billion and is not subject to a financing condition. It is expected to close in the fourth quarter of 2009, eBay said.

Zennstrom and Friis will contribute Joltid software and make a significant capital investment in exchange for their stake in the company.

The agreement gives Skype ownership over all software previously licensed from Joltid and ends all litigation pending against the investor group and eBay at the closing of the acquisition.

Andreessen Horowitz founder Marc Andreessen, who also founded Netscape Communications, said he sees better growth prospects for Skype as a private company, including more flexibility to make strategic investments.

“We have very ambitious goals in terms of products and product strategies,” Andreessen said, citing mobile as one area for growth.

The technology entrepreneur said that his firm Andreessen Horowitz would continue to work with Index Ventures on different deals and said that the firms were currently in talks about two other technology investment opportunities. He declined to be more specific. (Reporting by Sinead Carew; Editing by Derek Caney)

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The company, which has immense real estate and private equity assets, has increased its deal activity in the past few months, including buying Anheuser-Busch InBev’s (ABI.BR) U.S. theme parks for up to $2.7 billion. It is also considering initial public offerings for a number of its companies.

Blackstone’s third-quarter earnings before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets — a measure it calls “economic net income” (ENI) — were $278.4 million, compared with a loss of $509.3 million a year earlier.

On an after-tax basis, ENI was 25 cents a share. Analysts expected, on average, 15 cents a share, according to Thomson Reuters I/B/E/S/.

Chief Executive Stephen Schwarzman said in a press release that the worst is over, although a recovery in the economy could be “gradual and uneven.”

“We see many opportunities to deploy our substantial available capital,” he said in a statement.

The value of Blackstone’s private equity portfolio rose by 5 percent in the third quarter, although the value of its real estate portfolio fell by 0.4 percent.

Blackstone shares rose 56 cents to $14.43 in early trading on Friday. The shares have doubled in price this year, and the company is valued at about $15.6 billion at current levels. It went public in June 2007 at $31 a share.

Blackstone prefers to focus on the measure ENI because of the big payouts associated with its more than $4 billion initial public offering.

On a GAAP basis, its third-quarter net loss was $176 million, compared with a loss of $340 million a year earlier.

The company said it would pay its regular quarterly distribution of 30 cents a share to unitholders.

By Megan Davies
(Editing by John Wallace and Steve Orlofsky)

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PRESS RELEASE

TPH Partners, L.P., a middle market energy private equity fund, announced the formation of Storm Peak Energy, LLC, a Midland, Texas‐based company focused on the acquisition and development of oil and gas properties in the Permian Basin. The company is headed by seasoned Permian Basin operators, David Cox, 48, who serves as President and lead reservoir engineer; Bill Coggin, 55, as CFO; and Mark Ellerbe, 49, is VP of Operations. Cox and Ellerbe have worked in the area for approximately 25 years, both together at Mobil Oil as well as separately for other private‐equity backed companies. TPH Partners owns a majority of the company and will contribute at the Board of Directors’ level.

“The Permian Basin offers an excellent opportunity set for operators with the right expertise and relationships,” said Joe B. Foster, Chairman of TPH Partners. “We are very pleased to be partnering with this high quality Midland‐based team in its effort to build a new company. David, Bill and Mark have spent essentially their entire careers in the Basin and have demonstrated an ability to create value.”

As its first operating activity, Storm Peak is partnering with another established operator on the exploitation of an acreage block in one of the Basin’s horizontal oil plays.

TPH Partners makes equity investments in the energy industry with a specific focus on the upstream, oilfield services and midstream subsectors. TPH Partners’ other current portfolio companies include: BlueRock Energy Capital, an upstream finance business; Ingrain, Inc., a digital rock physics company; Meritage Midstream Services, a gathering and processing company; and UniversalPegasus, an engineering firm focusing primarily on the US onshore market and international subsea market. Additional information on TPH Partners can be found at www.tphpartners.com.

Storm Peak Energy is headquartered in Midland, Texas.

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PRESS RELEASE

Southfield Capital Advisors, a private investment firm focused on the lower middle-market, announced today that Steven Axel has recently joined the firm to lead in the formation of a new mezzanine fund. The mezzanine fund will apply to be licensed as a Small Business Investment Company and is expected to begin investing capital in 2010.

Mr. Axel brings over a dozen years of mezzanine investing experience in the lower middle market. Most recently, he spent 8 years as a Managing Director at Calvert Street Capital Partners, where he co-founded and managed their mezzanine fund, which invested over $140 million in 23 companies. Prior to Calvert Street, Mr. Axel was a Partner at Canterbury Capital Partners, which managed two mezzanine funds totaling over $400 million.

“We are very pleased to have someone of Steve’s caliber to lead this effort”, said Andy Levison, Founder of Southfield Capital.

“Mezzanine investing is a natural extension of our private equity business, and Steve’s background is highly complementary to our team’s experience in private equity and leveraged lending.”

Mr. Axel’s prior experience also includes underwriting leveraged financings at LaSalle Business Credit and consulting at Ernst & Young’s Financial Advisory Services group, and he began his career at Arthur Andersen & Co. Mr. Axel holds a Bachelor of Science degree in Economics from the Wharton School at the University of Pennsylvania and a Masters of Business Administration in Finance and Management from Columbia Business School.

About Southfield Capital

Founded in 2005, Southfield Capital Advisors provides capital for majority recapitalizations and management-led buyouts of privately owned businesses. The firm has $150 million in committed capital and makes investments in North American companies generating $5-15 million in EBITDA with proven business models, attractive growth and profitability trends and solid leadership. Southfield Capital partners with superior management teams with the collective interest of generating exceptional long-term financial results. Headquartered in Greenwich, CT, Southfield Capital also has offices in Alexandria, VA and Louisville, KY. More information on Southfield Capital can be found at www.southfieldcapital.com.

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PRESS RELEASE

Local group WAMEX Private Equity Management (WAMEX) announced today the first closing of US$ 55 million for the Multinational Industrial Fund II (MIF II), its second private equity fund targeting investments in middle market companies based in Mexico. MIF II builds upon the experience of Multinational Industrial Fund (MIF I), a US$ 66 million fund that has made eight investments since 2003 and is now in its harvesting phase.

MIF II is the first private equity fund to access Mexico’s public markets, tapping domestic institutional investors such as pension funds. This was accomplished through an investment vehicle listed on the Mexican Stock Exchange. The vehicle will invest in parallel with a private limited partnership also managed by WAMEX.

“We are proud to finalize this closing under a difficult global funding environment. It is a vote of confidence for the opportunities available in the Mexican economy and for the Wamex growth-based value creation proposition,” said Ernesto Warnholtz, Senior Partner of WAMEX.

“We worked hard to design an innovative, viable structure that incorporates best-in-class governance and reporting standards in order to raise, for the first time in Mexico, significant domestic funds for private equity. This fundraise will be complemented by foreign investors in further closings,” said Jose Contreras, Partner. “Our pipeline has very promising opportunities in manufacturing and services, with a combination of minority and majority stakes. The Mexican economy offers attractive opportunities where we can play a significant and active role,” added Kurt Lipp, Partner.

“This public placement is key for the Mexican market as it effectively opens up an alternative asset class for domestic institutional investors. We worked closely with issuer and investors to take advantage of this window of opportunity for enhanced portfolio diversification and profitability,” said Ricardo Fernández of placement agent Credit Suisse.

Established in 1999, WAMEX Private Equity Management, with offices in Mexico City and representatives in Germany, has a team of five operating partners and additional support staff managing portfolio companies in major Mexican cities.

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